Climate Change vs. the Economy

Jim Dawson | October 06, 2008 11:44am ET

COMMENTARY

As the second term of the George W. Bush's Administration nears its
end, policy makers, scientists, environmentalists and others
long-concerned about the planet-wide changes being triggered by global
warming are optimistic that with a new president, the United States
will finally take concrete steps to reduce carbon emissions and slow
climate change.

While it seems certain that the dithering in the executive branch
that has marked the last eight years of U.S. global warming policy will
end following the November elections, the path to regaining world
leadership in the efforts to slow climate change is not necessarily a
smooth one. And given the current collapse of Wall Street and the $700
billion bailout, passing any new legislation that involves carbon taxes
or increased energy costs – the favored first steps in combating
climate change – may be difficult, no matter how well intended.

But as the glaciers melt and the latest scientific evidence of global warming showing it is happening very quickly, the political landscape for dealing with climate change is shifting.

Both presidential candidates,
Democrat Barack Obama and Republican John McCain, not only acknowledge
that global warming is a serious threat, but that it is being caused by
the release of carbon into the atmosphere by human activities. The
statements of both candidates are strong.

"There can no longer be any doubt that human activities are
influencing the global climate and we must react quickly and
effectively," Obama said in a recent written answer to a question posed
by the non-profit Scientists and Engineers for America (SEA). "First,
the U.S. must get of the sidelines and take long-overdue action here at
home to reduce our own greenhouse gas emissions."

While that statement reflects the long-held Democratic position on
global warming, John McCain's views on climate change are also strong.
"We know that greenhouse gas emissions, by retaining heat within the
atmosphere, threaten disastrous changes in the climate," the Republican
said in his response to the SEA question. "The same fossil-fuels that
power our economic engine also produced greenhouse gases that retain
heat and thus threaten to alter the global climate."

Despite the "drill here, drill now," rhetoric that McCain as adopted
in recent weeks in his presidential campaign, he has long been a
leading advocate in the Senate – to the consternation of many of his
Republican colleagues – of policies that would limit carbon emissions
through a system called "cap and trade." Indeed, he and Senator Joe
Lieberman (I-Con.) introduced a bill in Congress to limit greenhouse
gas emissions in 2003.

Although it seems likely that the U.S. will pick up the mantle of
global leadership on climate change, the questions of when and how
climate change laws will be enacted remain open. In the current
Congress, which is nearing the end of its two-year session, there have
been seven different cap-and-trade bills introduced to deal with
climate change. The most successful made it out of committee and was
debated on the floor of the Senate. But it died a procedural death and
never came up for a vote.

The cap-and-trade approach sets a cap on how much carbon can be
released, and allows polluting industries to trade "pollution credits."
The system worked well in the 1980s to cut the acid rain problem in the
U.S., but determining the cap and figuring out the number of credits
industry should have are tied up in both economics and politics.

The carbon tax option would charge emitters a set fee, or tax, based
on how much carbon they release into the atmosphere. The fee makes
industries pay for the carbon they emit, but it doesn't guarantee a
limit on the emissions.

But both cap and trade and the carbon tax have problems in the
context of the current economic crisis, said Mike Lubell, director of
public affairs for the American Physical Society. "Unfortunately, a
carbon tax, or anything with the word 'tax' in it, will be a very hard
sell," he said. "And cap and trade would increase the price of energy,
so that isn't likely in the short term given the pain people are
feeling in their pocketbooks."

Paul Higgins, a senior policy fellow with the American
Meteorological Society, said all of the various climate change
proposals in the current Congress, be they cap and trade, carbon fees,
or a blend of the two, will expire with the end of the congressional
session. "I expect we will be starting over in the next session, but
they will rewrite, slightly modify, and reintroduce the
Boxer-Lieberman-Warner bill."

That is the bill that made it to the Senate floor for debate after
being repeatedly amended to make sure that, among other things, it
didn't cost industry too much, that it dealt with international energy
imports, and that it established a commission to determine the
structure for a greenhouse gas marketplace that couldn't be
manipulated. The issues involved in climate change legislation are
myriad and complex, with competing interests championed by hosts of
lobbyists.

"If something doesn't pass in 2009," Higgins said, "the most likely
reason is that we are still seeing Congress figuring out what it wants
to do."

Both McCain and Obama favor the cap-and-trade approach and, "if they
submit a plan early on then it could be done in the next Congress,"
said James Warner, a congressional affairs fellow with the Pew Center
for Global Climate Change. He noted that several states, both in the
Northeast and the West, have established or are preparing regional
cap-and-trade programs.

More pressure to get something done resulted from a 2007 Supreme
Court decision ruling that the Environmental Protection Agency has the
authority and the obligation to regulate carbon dioxide and other
greenhouse gases under the Clean Air Act. EPA officials, following
White House policy, have continued to object to regulating greenhouse
gas emissions, despite warnings from EPA scientists that the emissions
are a threat to human health. The EPA's resistance to regulation is
almost certain to change after the November elections.

Pew's Warner also noted that international negotiations about
climate change are ongoing and "the president would like to have made
some progress towards a domestic emissions cap by the end of 2009 [for
the International Climate Conference in Copenhagen]." A study by
climate policy analysts at the non-profit German Marshall Fund notes
that having legislation prior to the conference "would give the
negotiators a clear sense of the level of emissions reductions the
United States could commit to under a future international climate
agreement without risking the possibility of the Senate opposing U.S.
ratification of the agreement."

Both Warner and Higgins agree that limiting greenhouse emissions
involves the creation of a "new market" in which money gained from the
program through taxes, fees, or trading credits, could be used to
offset higher energy prices through rebates or other mechanisms.

Higgins noted that regulating greenhouse gases has a large long-term
economic benefit for the U.S., but it does involve winners and losers,
and the losers in the short term would be the companies that operate
power plants and other big industrial sources of pollution. Those also
are the organizations that have money and know how to lobby Congress.

Despite that, he said, the next Congress will have to pass climate
change legislation. "I'm not sure if it will happen in 2009 or 2010,"
he said, "but I don't think we'll go through another election without
passing something meaningful on climate change."

"There is never going to be a perfect moment for this," Warner said.
"I think it will be presented as a threat we have to deal with, and
we're Americans and have to step forward and deal with it."

Inside Science News Service is supported by the American Institute of Physics.